Restaurant Group serves up solid first half

First-half profits at restaurant and pub operator Restaurant Group came in slightly ahead of expectations, helping the firm to raised its interim dividend by an eighth.

The company, whose principal trading brands are Frankie & Benny's, Chiquito and Garfunkel's, said that adjusted pre-tax profit came in at £26.1m, 7% up from the £24.4m registered in the same period the year before and a little above the £25.9m expected by Peel Hunt.

Revenue increased by 7.5% from £234m to £252m in the six months to July 1st, while like-for-like sales increased by 3.25%. The company said that all of its restaurants and pubs performed "well" during the period, though it did say that Frankie & Benny's "traded strongly".

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"The Restaurant Group has delivered a record first half performance with a 7.5% increase in total sales and a 10.3% increase in earnings per share. Since the beginning of the year we have opened 13 new restaurants and we expect to open a total of 25-30 for the full year," said Chief Executive Andrew Page.

The dividend per share for the first half was raised from 4.0p to 4.5p.

The company said it was "delighted" with the performance of its first Coast to Coast restaurant which was opened at Brighton Marina in November 2011, themed as an American restaurant and bar. Since the half-year end, Restaurant Group has opened a second Coast to Coast in Newcastle and plans to launch a third in Stevenage in October.

"We believe that this brand has good potential, is scaleable and capable of delivering strong returns."

The company said that profits converted into cash at a "very health rate" and for the first half year, adjusted operating cash-flow was broadly unchanged at £38.5m, compared with £38.7m previously.

"We expect trading conditions during the second half to be similar to those we experienced during the first half of the year and I am confident that the Group is well placed to deliver further good progress," said Chairman Alan Jackson.